Safestay shares slump as profits, forward bookings drop

25th Sep 2026 10:52

(Sharecast News) - Safestay shares tumbled on Friday after the hostel operator reported weaker first-half trading and warned that forward bookings remained sharply below last year's level.

For the six months to 30 June, revenue from continuing operations fell 10.6% to £8.4m, as occupancy declined to 60.8% from 68.2%, outweighing an 8.3% increase in the average bed rate to £22.10.

Adjusted EBITDA dropped to £0.6m from £2.1m as the adjusted EBITDA margin sank to 7.5% from 22.6%.

"This reflects continued challenging trading conditions across the group's portfolio alongside higher costs, including increases in the National Living Wage and National Insurance contributions in the UK as well as higher operating expenses," the company said.

On an unadjusted basis, the group swung to a £1.9m loss after tax from a £471,000 profit a year earlier.

Looking ahead, Safestay said like-for-like forward bookings stood at £3.7m as of 22 September, down 21% year-on-year, reflecting a weaker consumer environment and tourist levies in some markets. It also flagged continuing cost pressures from VAT changes in Europe and higher business rates and employment costs in the UK.

The company nevertheless said its new operational management team was implementing measures aimed at improving demand and profitability, while recent openings in Naples and Brighton were performing well.

The board said it remained positive on Safestay's longer-term prospects and was continuing to assess disposals, sale-and-leasebacks, franchising and other asset-light growth options.

Liquidity improved following the £5.1m disposal of its Glasgow property, with available cash rising 70% to £4.6m at the period end.

The shares were down 28.2% at 8.98p by 1155 BST.

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